Americans are now richer than ever – with one in every 130 people in the United States a bona-fide millionaire, a study reveals.
And thanks to a rocketing stock market and strong economic conditions, the wealth of millionaires here and in Canada also increased dramatically, rising 14 percent last year to a staggering total of $8.5 trillion.
The World Wealth Report by financial houses Merrill Lynch and Capgemini also said the United States was the unparalleled leader in the personal wealth market because of aggressive investment strategies.
But the rest of the world is doing just fine, too – in 2003, the number of global millionaires increased by 500,000 to 7.7 million, the report said.
It signals a sensational rebound in wealth to levels not seen since before the recession of 2001 and 2002.
The report counts millionaires as those people with $1 million or more in assets – excluding homes and real estate.
“High net-worth individuals were quick to respond to global trends affecting their ability to preserve and grow wealth,” said James Gorman, president of Merrill Lynch’s Global Private Client group.
“They benefited from a strong stock market rally and solid, global economic growth.
“In particular, wealthy investors in the U.S., China and India were able to capitalize on these trends despite a great deal of geopolitical uncertainty.”
North America and Asia led the rise in the creation of wealth. Europe, Latin America and the Middle East moved ahead with more modest gains.
Europe continued to show lower growth in millionaires and their assets than North America, “primarily due to restrictive income-tax policies which impede the ability to accumulate personal wealth,” the report said.
It said the proportion of millionaires’ cash invested in the stock market rose to 35 percent last year from 20 percent in 2002 and investments in high-risk hedge funds rose to 13 percent from 10 percent.
The report predicts huge growth in millionaires’ assets in the coming years, with an average annual 7 percent increase through 2008 to a total of $40.7 trillion.
Analysts at Merrill Lynch and Capgemini said despite the conflict in Iraq, the attitudes of American investors remain very positive.
They add that President Bush’s ongoing tax cuts and his plan to phase out the inheritance tax were positives for last year’s growth.
As proof of the growing economy, analysts pointed to Microsoft chairman Bill Gates, who remains the world’s richest person.
Gates’ wealth rose 14 percent last year to $46.6 billion.
Thanks a million!
2,270,000 – number of millionaires in U.S. in 2003.
14% – percentage increase of U.S. millionaires over 2002
35% – percentage of millionaire holdings in stock accounts
$8.5 trillion – total worth of millionaires in U.S. and Canada
$40.7 trillion – what global assets of millionaires will total in 2008
$46.6 billion – wealth of Microsoft czar Bill Gates
8 – of world’s 10 richest billionaires come from U.S.
4 – the multiple at which North American assets grew vs. European assets